Adjusting Entries That Reflect a Change in Accounting Principle Used

question 14

Multiple Choice

Adjusting entries that reflect a change in accounting principle used to value inventories are classified as

• A)corrections.
• B)estimates.
• C)deferrals.
• D)revaluations.

---

Definitions:

Incidental Damages

Expenses or losses that occur as a direct result of a breach of contract, distinct from direct damages.

Consequential Damages

A type of damages that arise not directly from a wrongful act but from the results of the act, which may not have been foreseeable.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

C.O.D.

C.O.D. stands for Cash on Delivery; it is a transaction where payment is collected at the time of delivery rather than in advance.